Tuesday, November 23, 2010

Brad DeLong objects to my recent NY Times column by displaying some Tax Policy Center data that, he says, shows the Bowles-Simpson tax plan is hard on the poor and easy on the rich. Progressives, he concludes, should oppose the plan.

The problem, however, is the benchmark used in this particular table: current law as of 2015. Under current law, all of the Bush tax cuts expire, and millions of new taxpayers are hit by the AMT. That is an outcome that has never been in effect and that neither political party endorses. It is an artifact of legislative history.

A better benchmark, as noted by Howard Gleckman of the Tax Policy Center, is current policy. Here are those results. The implication is exactly the opposite. All income groups take a hit, particularly those at the top of the distribution.

About Me

I am the Robert M. Beren Professor of Economics at Harvard University, where I teach introductory economics (ec 10). I use this blog to keep in touch with my current and former students. Teachers and students at other schools, as well as others interested in economic issues, are welcome to use this resource.